Milan, Dec 20: Italy's most powerful industrial dynasty, the Agnellis, have chosen the grandson of family patriarch Gianni Agnelli to represent their interests on the board of car manufacturer Fiat.

Fiat said in a statement that John Elkann, the eldest son of Agnelli's daughter Margherita and her first husband Alain Elkann, would join the company's board.

The appointment follows the death from stomach cancer on Saturday of Giovanni Alberto Agnelli, nephew of Gianni Agnelli, who was being groomed to take over the chairmanship of Italy's biggest private industrial group.

Fiat said the appointment of Elkann to the board was the best way of ensuring the continuation of the family's association with the company founded by Gianni Agnelli's grandfather, Giovanni Agnelli.

The Agnelli family exercises control of Fiat through two holding companies, IFI and Ifil, in alliance with other key shareholders, notably Italian merchant bank Mediobanca and Deutsche Bank.

"John Elkann is young, but has already shown that he possesses notable capacities and moral qualities," the statement quoted Agnelli as saying.

"I believe the entry of John is the most significant way tomake felt, even symbolically, the continued proximity of the family to Fiat and the management which is responsible for conducting the running of the company," he said.

Agnelli said John Elkann "who is about to turn 22, is the same age as I was when I joined the board in 1943."

The remark was full of symbolic significance. Agnelli was thrust into the limelight after his father, Edoardo, was killed in a plane crash in 1935 and finally took over as company chairman in 1967 after a long apprenticeship.

Giovanni Alberto, who was the son of Gianni Agnelli's brother Umberto, was taken ill in April and died at the family home outside Turin at the weekend.

The appointment of Elkann shows the family did not want to lose any time in deciding who will represent its interests in Fiat in the years ahead and may even have made up its mind some time before Giovanni Alberto's death, analysts said.

Fiat's current chairman, Cesare Romiti, reaches the mandatory retirement age for board members next year.

He joined Fiat in 1974 and has guided the group, which has interests ranging from car manufacture to civil engineering, through turbulent times in the late 1970s and again turned it around in the early 1990s.

Italian newspapers had reported in recent months that Paolo Fresco, a top manager nearing the end of the year at US group General Electric, was expected to take over the chairmanship when Romiti stood down.

Had he lived, Giovanni Alberto would probably have become deputy chairman next year before moving into the top job at some point in the future.

Fresco is believed to be no longer interested in the Fiat chairmanship and there is now a possibility that Romiti could be asked to stay on for another year or so to give more time to identify a longer term successor.

Gianni Agnelli's younger brother, Umberto, has also been mentioned as a possible Romiti replacement.

Gianni Agnelli headed the company for nearly 30 years until his retirement last year.

Before Agnelli ascended the Fiat throne, the group was run for some 20 years after World War Two by Vittorio Valletta a captain of industry of legendary toughness and vision who acted as Agnelli's mentor.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.